Implementing a Dividend Yield Screen

The current market environment has been tough on many investors. With bond yields at historic lows and a volatile stock market, many investors are left wondering where to put their money. One investment that fell off the radar screen in recent years was the dividend-paying stock. However, dividends are in vogue once again, helped in large part by last year’s tax cut on dividend payments. The rate on qualified dividends was cut to 15% from marginal income tax rates that had been as high as 38.6% (dividends on most common stocks qualify for the tax break, while dividends on REITs and preferred stocks do not). Corporations also responded to the dividend tax cut: Since the beginning of 2003, according to a recent Money magazine, 23 of the S&P 500 companies paid dividends for the first time, while 233 upped their dividend payments at least once. All told, 372 of the S&P 500 companies now pay a dividend.

Dividends are attractive to investors because they contribute to returns in any market situation. In fact, since 1926 dividends have accounted for over 40% of stocks’ total returns, according to Thomson/Baseline. In addition, the income appeal of dividend-paying stocks helps limit steep losses during market downturns. However, just because a company pays a dividend does not mean it deserves your investment dollars. The question becomes: Which dividend-paying companies are good investment opportunities?

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Discussion

Robert from VA posted over 5 years ago:

Appreciate the info on the SIP Dividend Yield screen. Don't appreciate it is a recycled article from 2004 with no opening comments citing it is a rerun, with no comment that some of the cited web screeners are no longer available and no update on the screen results.

This could have been done better - just a heads up sentence on the date of the article would have alerted most readers.

Later, Bob B.

Jim from AL posted over 5 years ago:

You should have alerted that this was not a current article

E from GA posted over 5 years ago:

One more reason for losing faith.

Marvin from CA posted over 5 years ago:

I agree with the previous comments -- is there
an APOLOGY with an explanation????????????
Like, maybe, a poor, over-worked, un-paid
intern posted this SEVEN year-old article
as if it were new?????????????????????

Wayne from IL posted over 5 years ago:

The weekly features for the CI Email are intended to re-introduce older articles that are still of use today. We have a wealth of content available to subscribers that many are unaware of because they do not search the archives. I do apologize that the article covered websites that no longer exist. That is my fault. I will do a better job of vetting the articles we run going forward. Wayne A. Thorp, CFA

William Graca from CA posted 5 months ago:

Please update this article, as it was referenced in the June 2016 AAII Journal.
The images in this article do not render.
To take action or at least test this theory we would need to know more about AAII Stock Screener on this matter, or current competitive screeners regarding this "makes sense" article.

Jackie McClellan from IL posted 5 months ago:

The CI compliment of the June 2016 AAII Journal is going to be released in the June CI edition (as mentioned in the Journal article). June CI will be released on June 18th.